Financial Accounting Principles : Report
Added on 2020-06-06
33 Pages4567 Words40 Views
Political Science
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Financial AccountingPrinciples
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1A Presenting report to the line manager about accounting rules, regulations and principles11. Determining the financial accounting................................................................................12. Identifying the necessary financial accounting regulations................................................23. Defining the rules and principles of accounting.................................................................34. Elaborating the concepts and conventions relevant with material disclosure and consistency................................................................................................................................................4CLIENT 1........................................................................................................................................51. Presenting the book of prime entries..................................................................................52. Completion of the double entry recording in the ledgers...................................................73. Determining the arithmetical accuracy of with the help of trial balance.........................15CLIENT 2......................................................................................................................................15A Disclosure of the income statement for Peter piper for 31st December 2017..................15B Disclosure of the financial position of Peter piper of 31st December 2017.....................17CLIENT 3......................................................................................................................................19A Disclosure of the financial income statement of Raintree limited....................................19B. Disclosure of the financial postilion of Raintree limited such as....................................20C. Analysing the concepts of prudence and consistency of accounting...............................24D. Reason behind analysing depreciation with the help of two methods and their importances..............................................................................................................................................25CLIENT 4......................................................................................................................................26A Determining the purpose of preparing bank statement for Kendal..................................26B. Factors that influence the causes of recording the transaction of bank statements.........26C. Disclosure of BRS...........................................................................................................26CLIENT 5......................................................................................................................................27A Preparing the purchase and sales ledger control accounts................................................27B. Analysing the needs of preparing control account...........................................................28CLIENT 6......................................................................................................................................29A. Determining the Suspense account and its main features................................................29
B. Preparing the Trial balance on the basis of proposed elements.......................................29C. Preparing the journal entries on the basis of trial balance adjustments...........................29D. Determination the comparison between suspense-account and clearing account...........30CONCLUSION..............................................................................................................................30REFERENCES..............................................................................................................................31
INTRODUCTIONTo estimate the future expenses and having the accurate control over the costs for theoperations held in the premises there is need to have the proper financial control. In order toanalyse various principles and norms of the financial disclosure will be helpful for professionalsin terms of presenting the disclosure of such data set. In the present report there will bediscussion based on various financial accounting, boards, principles, concepts, rules andregulation that is fruitful in terms of analysing the growth and profitability of entity. There willbe various clients and their transactions will be recoded in various accounting books and theywill be advised to improve the financial growth of firm.A Presenting report to the line manager about accounting rules, regulations and principlesTo: Line managerSubject: Informations relevant with accounting principles, rules and regulations whichessential for financial growth of organisation.Sir,To enhance the profitability and the operational functioning of the organisation in termsof analysing the costs, expenses and the level of financial spending over each tasks in thepremises. Therefore, it plays the main role in presenting the disclosure of such data set byfollowing all the rules and regulations which are being set by accounting standards and boards.However, such tools helps in financial decision making with efficient accuracy such as:1. Determining the financial accountingIt refers to the record of all the financial transactions in different books or financialinstruments that will be disclosed among the users of such financial informations such asOwners, accounting professionals and investors. There are 4 kinds of financial statements suchas:1
Illustration 1: Types of financial accounts(Source: Gordon and et.al., 2017)Therefore, in consideration with these statements the business will be beneficial in termsof having accurate decisions relevant with costs control, lowering down the overhead expensesas well as planning for the expansion of operational activities for business. On the other side theexternal stakeholders such as shareholder's they seek the turnover generated by firm during aperiod that will benefit them in acquiring the appropriate dividends.2. Identifying the necessary financial accounting regulationsTo present the financial disclosure this is essential that the organisation must follow theframework of accounting operations. These are the principles which are universally followedand accepted by each individual or corporations. Therefore, the motive behind such regulationsis that a company can become able to facilitate the financial informations to the worldwideusers as well as they will become able to understand growth and profitability of a business andthey can make investment decision for the firm (Li, Sougiannis and Wang, 2017). It will behelpful for entity in terms of acquiring the appropriate capital funds for the future operations.Therefore, there are some accounting standards and boards which are as follows:IASB:This is the board of setting the accounting standards that helps in funnelling in terms ofpreparing the favourable reports of financial transactions (Kouki, 2018). These boards arebeneficial as it facilitates the adequate information as well as guide the accounting professionalto follow such rules and prepare for the financial disclosure.FRC:This board is constituted by Ireland and UK for their personal regulatory in terms of2
financial disclosure and the trade practices between such nations. Therefore, this board isincorporated with the six relevant operational bodies such as financial reporting review panel,accounting standards board, accountancy and actuarial discipline board, auditing practicesboard, board for actuarial standards and professional oversight board (Financial ReportingCouncil, 2018).IFRS:This is the board which has facilitated the adequate informations relevant with thefinancial disclosure made bay organisation. The norms and principles set by this financialstandard with the motive to facilitate the proper framework of presenting the data set. Itincludes preparation of various financial statement such as balance sheet, profit and lossaccounts, change in equity and cash flow statements (Ombati and Shukla, 2018). Therefore,with the help of such standards the business will be fruitful in terms of attracting theinternational investors and that will probably increases capital generation of firm.3. Defining the rules and principles of accountingTo analyse the business performance and have the strong financial decisions there arevarious rules and principles of accounting which are facilitated by the GAAP and variousaccounting boards. The motive of presenting board is to present accurate information,techniques and methods to make disclosure of financial data base by professionals. Therefore,there are several rules and principles of accounts such as:Monetary Unit:These principles lie over the concept that all the transactions must be recorded in thecurrency from such as purchase of fixed assets, making payments or revenue gained by firm(Warren and Jones, 2018). Thus, the motive behind such system is that it will be helpful for thebusiness in terms of decisions making as well as engaging them in estimating costs incurred inliabilities and assets of the period.Going Concern:This principle lies over the concept that if a business has started operating in the currenttime it will be estimated that it will operate in the upcoming time too. It is assumed that it willhave continues operations which helps in analysing the depreciation value, estimating expenses3
and the future investments of the firm (Basic accounting principles, 2017).Conservatism:This concept lies over the technique of recording the transactions on the basis of suretyand reliability. Therefore, it can be said that the transactions relevant with liabilities andexpense of organisation which are to be recorded mediately as it incurred while on the otherside to record the transactions relevant with assets and revenue generated by firm there is needto have surety and adequate research over the sources from where they have incurred (Cairns,2018). It helps in recognising the losses in the initial level so an accurate decision can be madein context with overcoming such financial deficits.Cost principles:In accordance with this concept it can be said that there is need to have record of all thetransaction such as purchase and sale of products and services on their fair value. Therefore, itwill be helpful in terms of analysing the profits and losses gained by firm while dealing withsuch commodities (Marshall, 2016). On the other side, it will be helpful as the determined costsof such activities will be considers and strong decision will help in lowering down suchexpenses.Time period principles:The principle is consisted of the time boundedness over the disclosure of the financialdata set. Therefore, it will be fruitful for the organisation in terms of preparing the financialstatement on the periodical basis such as quarterly, half yearly or annually. It can be based onfinancial year for making the adequate disclosure of the financial data set (Oulasvirta, 2016).Hence, with the influence of time limits the professionals in firm ad the external will analysegrowth and performance during such period.4. Elaborating the concepts and conventions relevant with material disclosure and consistencyConcepts and Conventions of material disclosure:In term with these accounting principles which lie over the concept that all the data mustbe recorded and transit have a material fact and must be authenticate. Therefore, the purchaseand sales of any product and service should be relevant with the proper source such as there isneed to have record of date, time and consideration which will be beneficial for the operational4
development (Pratt, 2016).Concepts and convention of consistency:This concept lies over the principle that every financial disclosure must be on theregular basis such as presenting a data set will have the preparation for the next presentation(Singleton-Green, 2016). Therefore, it will build the continuity in the operations of the firm.There will be adequate revenue gathering on the basis of proper business execution.CLIENT 11. Presenting the book of prime entriesThe presentation relevant with the journals entries following the transactions incurredAlexandra Study. It will be based on various adjusting entries relevant with the purchase andsales of the business such as:5
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